With craft-beer volume growing nationally in the double digits and – just to cite one example – Breckenridge Brewery just announcing plans for a $20 million new brewery complex along the South Platte River in Littleton, it may seem somewhat odd for the U.S. Justice Department to file an antitrust lawsuit against Anheuser-Busch InBev’s (ABI) proposed acquisition of Grupo Modelo, the maker of Corona and other beers.

Competition in the suds industry seems to be thriving, not at risk of flickering out.

Last year, in fact, the Beer Institute announced that there were now more breweries operating in the U.S. than at any time in American history – with over 2,700.

Still, this federal antitrust action isn’t nearly as lacking in merit as some we’ve seen from Washington, such as the one the Federal Trade Commission pursued against Whole Foods a few years ago when it acquired Wild Oats. Although craft brews are thriving and the legacy beer industry is stagnant or contracting, “ABI and Modelo – the largest and third largest beer firms, respectively – together control about 46 percent of annual sales in the United States,” the Justice Department pointed out in a press release explaining the suit. “MillerCoors, the second largest beer firm, accounts for about 29 percent of nationwide sales.”

According to that press release, the department’s complaint argues that “the U.S. beer market is already highly concentrated, and prices are increased by strategic interactions among the largest brewers, including ABI and MillerCoors. ABI generally acts as the price leader, implementing annual price increases in the sub-premium, premium and premium plus segments of the U.S. beer industry. MillerCoors and other brewers have typically joined the ABI price increases, while Modelo has not. By pricing aggressively, Modelo – through its importer, Crown Imports – puts pressure on ABI to maintain or lower prices, especially in certain parts of the country. As a result, Modelo has become a particularly important competitor in the U.S. market.”

If Modelo truly has acted as a check on price increases, then maybe Justice has good case. But here in the craft brew paradise that Colorado has become, the idea that competition is in jeopardy is a difficult sell.

Vincent Carroll is The Denver Post's editorial page editor. He has been writing commentary on politics and public policy in Colorado since 1982 and was originally with the Rocky Mountain News, where he was also editor of the editorial pages until that newspaper gave up the ghost in 2009.

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